Pune: Edible Oil Imports Canceled, But No Price Hike Expected Before Diwali
Pune, 30th September 2024: Edible oil importers in India have canceled contracts to import approximately 100,000 tonnes of palm oil, choosing instead to sell to traders from other countries to capitalize on the rising global prices of palm oil. Despite these cancellations, there is no imminent threat of a price hike or shortage of edible oil during the Diwali season.
Palm oil, typically the cheapest edible oil imported into India, was priced at $979 per tonne in July before India increased its import duty. Currently, the import price stands at $1,011 per tonne. In comparison, higher-quality crude soybean oil, known for being healthier, is being imported at $1,015 per tonne, and sunflower oil at $1,019 per tonne. Back in July, crude soybean oil was priced at $1,054, and sunflower oil at $1,043 per tonne, making sunflower oil the most expensive. However, now the price difference between crude palm oil, soybean oil, and sunflower oil has narrowed, prompting importers to shift focus towards importing soybean and sunflower oils.
Dr. Bharat Mehta, Executive President of the Solvent Extractors Association (SEA), explained that India’s recent increase in import duty on edible oil, combined with global factors, has influenced the market. Indonesia, the world’s largest producer of palm oil, has reduced production due to an increased focus on biodiesel production under its B-40 policy. Meanwhile, Malaysia, the second-largest producer, has raised the price of palm oil due to increased export duties.
While traders canceled palm oil import deals to benefit from higher prices in the global market, the minimal price difference between the various oils has led to increased imports of soybean and sunflower oil. According to Shrikant Kuvalekar, an expert in the agricultural market, the country has sufficient reserves of edible oil, and domestic oilseed refining is set to begin soon. As a result, no shortage or price hike is expected during Diwali.
